June 04, 2013

Mediterranean Resources Announces Acquisition Of Past-producing Antimony Areas In Spain

Vancouver, BC, Mediterranean Resources Ltd. (TSX: MNR; Frankfurt: MHM1) ("Mediterranean") is pleased to announce that it has registered the concessions of two past-producing Antimony deposits in the Spanish province of Extremadura. This action is the first of a planned aggregation of producing and past-producing Antimony assets around the Mediterranean Basin. Extremadura has the most extensive history of Antimony mining of any part of Spain and hosted, until 1984, the largest producing Antimony mine in Europe.

The Acquired Areas

The two areas acquired by Mediterranean have been under review by the Company for several months. These consist of the past-producing Mina Pilar at Herrera Del Duque and the Mina Susana at Pueblo de Alcocer, both in the South-east of the province of Extremadura. This is a province that is located to the west of Madrid, bordering Portugal.

The Pilar Mine is located about 4 miles east of Herrera del Duque (Badajoz), on the western slope of the Sierra de la Dehesa, in the vicinity of Arroyo de Cañada Mojada. Access to the workings is by a road that originates in the town of Herrera del Duque. The past mining operation was carried out using open-pit techniques. The mine is currently inactive and in its last operating period (1970-1977) stibnite was mined by hand. There is a principal pit, west of the stream, the dimensions of which are 80 m long, 20m wide and depths from 5m to 28 m. There are other minor pits east of the creek. A cross-section of the old pit is shown here:

The mining operation was performed by benching operating on the main face. The site is reef-type deposit with slightly sloping reefs, with gentle dips between 15° and 20° to the east and directions close to the N-S. The reefs filled sub-horizontal fractures and which cut cleanly the schists. They have a lenticular morphology, with widening where mineralization is concentrated in pods. The image here shows the pit in 1977, the last year of mining operations;

The Mina Susana is a small showing located in the wayside called Costera, in the municipality of Puebla de Alcocer. It has been exploited in the past by underground mining. The exact dates of this past production are unknown. Access to the workings is done by going from Cabeza Del Buey to Puebla de Alcocer. It takes a route heading east and some 3.5km ahead is the showing. The photo that follows shows the old entrance to the mine;

Antimony Dynamics

Antimony is a chemical element with symbol Sb and atomic number 51. It is one of the oldest elements as far as usage, with the Ancient Egyptians having used it for make-up (kohl for the dramatic eye effects). The ancient Romans called it Stibium, hence its chemical symbol Sb. It was established to be an element around the 17th century.

The abundance of antimony in the Earth's crust is estimated at 0.2 to 0.5 parts per million, comparable to thallium at 0.5 parts per million and silver at 0.07 ppm. Even though Sb is not abundant, it is found in over 100 mineral species. Antimony is sometimes found natively, but more frequently it is found in the sulfide stibnite (Sb2S3) which is the predominant ore mineral.


The main traditional application for metallic antimony was as an alloying material for lead and tin and for lead antimony plates in lead-acid batteries. Alloying lead and tin with antimony improves the properties of the alloys which are used in solders, bullets and plain bearings. Antimony compounds are prominent additives for chlorine- and bromine-containing fire retardants found in many commercial and domestic products.

In the past, Sb prices often fluctuated with the outbreak of war because of its military applications. However, more recently the emerging growth of Sb has been for applications in microelectronics and as fire retardants (antimony trioxide-ATO). The later represents 72% of its primary antimony consumption in Europe; for China 50%; and, the US about 60%.

Antimony trioxide acts as a synergist to improve the performance of other flame retardants such as aluminum hydroxide, magnesium hydroxide and halogenated compounds. This enhanced performance minimizes the amount of flame retardant required. Antimony trioxide is used in this way in many products including plastics, textiles, rubber, adhesives and plastic covers for aircrafts and automobiles. Interestingly the latest application of Sb (the flame retardant aspect) allows for virtually no recycling.

Strong growth in new uses of ATO have more than offset the second most common use of Antimony alloy as a hardener for lead electrodes in lead acid batteries. This use continues to decline as the antimony content of typical automotive battery alloys has declined by weight to 1.6% from 7% in the past. In addition, the battery use maybe further reduced because as calcium, aluminum and tin alloys are expected to replace most of the battery applications over time.

Production Sources

The Chinese have dominated global Antimony production since the mid-1800s with the possession of some of the most prolific mines in the world and a vast network of refineries (both major and "backyard"). In particular China's place as the largest producer of Antimony and its compounds was due to the Xikuangshan Mine in Hunan. However all "good" things must come to an end and the Chinese have staged crackdowns on the more polluting small-scale operators and this has changed not only the Chinese industry, but also has impacted the global outlook for Antimony demand.

The leading firm of specialty metals consultants, Roskill, have estimated that in primary production, in 2010, China held a 76.75% share of world's supply with 120,462 tonnes (90,000 tonnes of reported and 30,464 tonnes of un-reported production), followed by Russia (4.14% share, 6,500 tonnes of production), Myanmar (3.76% share, 5,897 tonnes), Canada (3.61% share, 5,660 tonnes), Tajikistan (3.42% share, 5,370 tonnes) and Bolivia (3.17% share, 4,980 tonnes). Roskill also estimated that secondary production globally in 2010 was 39,540 tonnes.

However we would note that since that time the Chinese have purchased Canada's Beaver Creek mine and shut it down while also acquiring Anchor Resources in Australia, which currently remains in limbo.

Reported production of Antimony in China fell in 2010 and is unlikely to increase in the coming years, according to Roskill's report. No significant antimony deposits in China have been developed for about ten years, and the remaining economic reserves are being rapidly depleted. This would appear to be a 'sunset" moment for the era of Chinese dominance of this metal.

Source: USGS

The fall in production, not unsurprisingly, produced a surge in prices of Sb to over $17,000 per ton in 2010. The price then dropped back to $12,000 per tonne in 2011 before rebounding to around $14,000 per tonne and then easing back to around $10,000 per tonne currently. Roskill estimate in their 2012 survey of the metals that prices should range between US11-14,000 per tonne over coming years. Antimony is out there with Tungsten in having a similarly resilient trend. Both, it might be noted, have a similar dynamic of dramatic over-exploitation by the Chinese combined with long term predatory pricing.

Source: Roskill

Ongoing Development

Mediterranean is actively pursuing Antimony assets in Turkey, the Balkans and the Iberian Peninsula with an exclusive focus upon producing or past-producing assets. The goal is to become a producer of Antimony in the short-term providing a source of income while the company develops its mines at Tac and Corak in north-eastern Turkey. Consideration is being given to eventually distributing the shares of this new business to MNR's shareholders to create one of the few pure play Antimony mining and development vehicles available in Western capital markets.

Meanwhile the company is advancing with the previously announced IPO of its main Turkish subsidiary Akdeniz Resources Madencilik on the Venture Board (GIP) of the Istanbul Stock Exchange. Negotiations on this issue have been advancing with the Capital Markets Board (SPK) in recent weeks. Timetabling for the issue shall begin shortly.

Signed on behalf of the Board of Directors.

For further information please contact:

Christopher Ecclestone
Chief Executive Officer

Neither Toronto Stock Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Toronto Stock Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release shall not constitute an offer to sell or the solicitation of an offer to buy securities of the Company in any jurisdiction. The securities to be issued pursuant to the Unit Offering by the Company have not and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or the securities laws of any state of the United States, and may not be offered or sold in the United States absent registration or an applicable exemption therefrom under the 1933 Act and the securities laws of all applicable states.

Certain information set out in this News Release constitutes forward-looking information, which may include information relating to estimates of sales and revenue of MNR. Forward-looking statements (often, but not always, identified by the use of words such as "expect", "may", "could", "anticipate" or "will" and similar expressions) may describe expectations, opinions or guidance that are not statements of fact and which may be based upon information provided by third parties. Forward-looking statements are based upon the opinions, expectations and estimates of management of the Company as at the date the statements are made and are subject to a variety of known and unknown risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Those factors include, but are not limited to risks, uncertainties and other factors that are beyond the control of the Company, risks associated with the industry in general, commodity prices and exchange rate changes, operational risks associated with exploration, development and production operations, delays or changes in plans, risks associated with the uncertainty of reserve estimates, health and safety risks and the uncertainty of estimates and projections of production, costs and expenses. In light of the risks and uncertainties associated with forward-looking statements, readers are cautioned not to place undue reliance upon forward-looking information. Although the Company believes that the expectations reflected in the forward-looking statements set out in this press release or incorporated herein by reference are reasonable, it can give no assurance that such expectations will prove to have been correct. The forward-looking statements of the Company contained in this press release, or incorporated herein by reference, are expressly qualified, in their entirety, by this cautionary statement.